India’s Unified Payments Interface (UPI) has emerged as a powerful driver of financial inclusion, transforming how people send and receive money and accounting for nearly 85% of all digital payments in 2025. Yet this rapid expansion has not benefited everyone equally. For many low-income women—especially those with limited digital access and literacy—bank accounts remain underused, savings stay informal, and digital payments feel out of reach, underscoring the gap between the availability of digital infrastructure and meaningful financial inclusion.
To better understand and address this gap, 3ie, as part of its Women’s Economic Empowerment (WEE) portfolio in India and with support from the Gates Foundation, is undertaking a study on the gender-intentional design and adoption of digital platforms, with digital payments as a core focus. In collaboration with Yugantar and other stakeholders, 3ie is examining women’s engagement with UPI-enabled services, mapping user journeys, and identifying barriers that limit uptake and sustained use.
These research efforts build directly on Yugantar’s on-the-ground work with domestic workers in Telangana between 2021 and 2023. Drawing on lessons from its financial inclusion program, Yugantar launched the Digital Budget Rani initiative to help women use UPI—particularly UPI 123PAY on feature phones—through hands-on support delivered by trained community mobilisers. In this blog, we share insights from these trainings and how UPI 123PAY can be strengthened to move women from passive account owners to active, confident financial participants.
Community reach through the Digital Budget Rani Program
Through a network of 980 community mobilisers, the Digital Budget Rani program trained 41,532 marginalized women across 14 districts in Telangana and Andhra Pradesh to make their first digital payment. The initiative used multiple platforms—PhonePe, Google Pay, and UPI 123PAY IVR—to ensure inclusion of both smartphone and feature phone users, training 55.6% on UPI apps, 35.5% on UPI 123PAY, and 35.5% on both. Most participants were reached out to in Hyderabad through the Telangana Domestic Workers’ Union, with later expansion into rural and semi-urban areas through collaborations with the Society for the Elimination of Rural Poverty (SERP) and the Mission for the Elimination of Poverty in Municipal Areas (MEPMA), where 29% and 18% of women were trained, respectively. The emphasis on UPI 123PAY was critical, as Yugantar’s field exploration revealed many women did not own smartphones—echoing the finding from the Mobile Gender Gap Report 2024 that only 35% Indian women own smartphones. This reflected broader gender gaps in digital access and the need to enable secure, internet-free transactions through IVR-based solutions.
Key insights and recommendations
The training initiative offered a range of insights on women's experiences with digital financial tools, particularly in low-income settings. Apart from highlighting the challenges women face in navigating digital technologies, they also point out the enabling factors that can drive greater digital inclusion.
- Ensuring reliability
- Collaboration with on-the-ground efforts is needed to increase testing and ensure a reliable and intuitive technology for women from low-income communities. Often, a single negative experience with technology can lead to disengagement; hence, ensuring ease of use and reliability from the outset is critical to sustained adoption.
- Designing for wider user base
- Some features may limit uptake among low-income users. Daily transaction caps and the ₹5,000 P2P limit often do not reflect the realities of SHG payments, community remittances, or chit fund contributions, underscoring the need for greater use-case-driven flexibility. In addition, the Digital Budget Rani initiative revealed that low adoption of UPI 123PAY among feature phone users was driven by technical constraints rather than lack of demand—particularly difficulties in retrieving dual OTPs during IVR onboarding. Simple fixes, such as a call-back mechanism for OTP verification, could significantly reduce these barriers and improve inclusion.
- Trust building
- Participants embraced voice technology for its simplicity and familiarity. Features such as repetition of names and transaction amounts before transfers boosted confidence, reducing errors and addressing trust issues. This innovation holds significant potential to enhance financial inclusion in low-income communities.
- Strengthening support systems
- Women community leaders and networks were vital to building trust and facilitating peer learning, demonstrating how women's support systems can work to bridge the digital divide.
- Promoting UPI 123PAY technology in tandem
- Widely showcasing the use of UPI123, the way Paytm, GPay have been promoted for paying electricity bills, etc., is important to increase awareness of services and build trust. Overcoming the initial barrier of apprehension would be easier if 123Pay were viewed alongside app-based UPIs as a tool that not only simplifies certain tasks but also provides benefits that the current cash-only system cannot.
- Introducing an official ‘1800’ number
- This would increase users’ confidence as they feel anxious about a regular 10-digit number showing up as the 123PAY IVR number.
- Ensuring feedback and redressal
- Without robust redressal mechanisms, users are penalised heavily for mistakes. This fear discourages women, who have historically not been allowed to participate in financial decisions, from attempting to adopt new technology.
- Increasing banking transparency
- Greater banking information and transparency are essential. Women appreciated being able to check their account balances, which gave them a sense of control and empowerment. However, a lack of clarity around transaction cuts and service fees from banks emerged as a barrier. Transparent communication from financial institutions is essential.
- Linking JAM (Jan Dhan, Aadhaar, Mobile) trinity
- Women face barriers in taking ownership of their ‘digital identity’ - JAM Trinity - and gaining access to the schemes and services this identity unlocks. Taking appointments to correct Aadhaar details is costly, difficult and time consuming. Increased access opportunities and support in linking these services is important.
- Supporting tech diversity with IVR
- A digital payment service that operates independently of data connection - leveraging IVR - enhances infrastructure diversity, improving network resilience and cybersecurity. Additionally, an IVR-based payment system can potentially provide critical network redundancy, ensure continuity and prevent disruptions in the event of system failures (Dupont, 2019).
UPI123PAY as a policy lever for systemic change
UPI gained support in Telangana as a way to reduce leakage and corruption in cash collections in self-help groups’ activities. The Society for the Elimination of Rural Poverty has partnered with Yugantar to train all SHG groups (46 lakh women) in the state to use UPI to pay EMIs. IVR-based digital systems—designed for feature phone users, those without data connectivity, and individuals with low literacy levels—will be instrumental in achieving this goal.
The initiative highlights how tailored solutions can advance women’s digital and economic inclusion and how digitized SHG payments can serve as a model for inclusive digital transformation. For UPI 123PAY to serve as a truly inclusive tool, improvements in user experience and adaptability are critical. With added technological stability, simplified onboarding, and rule adjustments that better reflect the needs of marginalized users, the platform has the potential to serve as a cornerstone in India’s broader financial inclusion goal.
